Until global demand for oil picks up — corresponding to growth in the world’s economy — prices will likely continue a downward trend, Citigroup’s Ed Morse said Thursday on CNBC.
“There’s a big seasonal issue in oil . It’s a very seasonal kind of commodity, and we’re moving into a period of time when refiners have much lower demand for oil because they’re in maintenance,” he said on “Fast Money.”
Morse, who is Citi’s head of commodities research, forecasted an annual increase of less than 1 million barrels a day.
“Demand is not particularly robust,” he said, adding that capacity is also high.
“Certainly, North America has become the new Middle East in a lot of ways, but I think the main issue that is on the horizon is demand. Unless demand picks up — and it won’t pick up until the global economy picks up — there’s more than ample supply,” he said.
“Talking about risk, the only thing that can bring prices up in the next couple of years is some major set of disruptions. It’s not just one, but it’s a couple of major ones.”
______________________________________________________
Got something to to say? Email us at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our website, email fastmoney@cnbc.com.